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Forces driving farm bill debate include WTO, budget, politics

According to the Dana Brooks, the driving forces for the 2007 farm bill will be the budget, the WTO, current farm conditions and politics.

“When the 2002 farm bill was written…the United States was in a budget surplus of $5.6 trillion over 10 years,” said the American Farm Bureau Federation's director of congressional relations. “In 2004, we had a record deficit of $412 billion and in 2005 we were again in deficit by over $300 billion. This does not include $70 billion spent on hurricanes in August/September nor does it include the war in Iraq which costs between $5 billion and $8 billion per month.”

Brooks, who spoke during the recent Agribusiness Conference at her alma mater, Arkansas State University in Jonesboro, next pointed to the ongoing WTO negotiations.

Reconvened last September, member nations struggled to find an agreement “that achieves increased market access for agriculture products, a reduction in trade-distorting domestic supports and a removal of export subsidies. Another deadline was missed in December and a push will be made to have an agreement in April or June…This would enable the new farm bill to be drafted in compliance with WTO rules.”

If not achieved, “do we write a farm bill using the current limits that were negotiated in the Uruguay Round without a WTO resolution? Or do we extend the current farm bill until we know the outcome of the Doha Round? One proposal…was to cut U.S. domestic support by 60 percent.”

At its annual meeting in January, the AFBF voted to extend the current farm bill until a WTO agreement is completed. “There is not a deadline date in our policy. However, within six months, we believe we will have a good indication whether WTO will come to an agreement, fail or be postponed.”

Brooks said the ruling on the WTO/Brazilian cotton case will “certainly have an effect on the structure of the next farm bill. The cotton Step 2 program will be terminated Aug. 1, 2006, the end of the cotton marketing year. The WTO ruled in the Brazil cotton case that the Step 2 program is not consistent with WTO rules. This sets precedence and gives the Brazilians a feather in their hat. It may open our programs up for closer scrutiny from other countries who allege U.S. farm programs have caused undue harm.”

Brooks warned that Canada has filed a complaint alleging U.S. corn dumping and there are rumors Uruguay will challenge U.S. rice programs.

When Freedom to Farm was written in 1996, commodity prices were at historical highs. Congress saw an opportunity to cut agriculture spending by decreasing government support and giving farmers more independence and flexibility, said Brooks. Producers were supposed to be spared frequent trips to the county FSA office.

A couple of years into Freedom to Farm, “commodity prices went in the toilet and all your input costs drastically increased. Energy prices skyrocketed and the country was experiencing one weather-related disaster after another.”

Brooks suggested the current climate looks much the same.

“Going back to 2001, (House Agriculture Committee leaders) realized the national budget surplus was dwindling and there was great unrest in the agriculture sector. Four consecutive years of low commodity prices, increased farm inputs such as fuel and fertilizer, and national weather disasters required government intervention by providing disaster assistant and double AMTA payments.”

The cost of the Freedom to Farm Bill had risen. But because the nation was thriving, the 2002 budget proposal provided agriculture an additional $73 billion.

“Numerous committee and field hearings yielded a farm bill with more payments for program crops, record funding for conservation, and significant increases for nutrition programs, such as food stamps. For the most part, farmers have enjoyed the security this farm bill has provided while still being able to receive their income from the market when prices are high.”

Relating what she's heard from most farmers, Brooks believes consensus would call for an extension of the current bill. If WTO negotiations are not completed, chances for an extension increase. Brooks sees that as unlikely, however.

“Everyone needs to realize fewer than 50 members of Congress have personal agriculture background. That's 50 out of 535 folks! Not a good percentage for us, is it?”

Something else to note: the Bush administration didn't weigh in on the last bill. “Quite frankly, when it did finally come to the table with a proposal or outline it was after Congress had completed its debates. That will absolutely not be the case this time.”

While showing a set of slides backing her contentions, Brooks said, “the 2002 farm bill is working…Frankly, agriculture didn't get (the U.S. federal budget) hundreds of billions of dollars in deficit nor can agriculture get us out…The (USDA) budget is less than 1 percent of the federal budget. This farm bill has worked. It is an investment. We have argued that the farm bill had a savings of $18 billion dollars for the first four years.”

Brooks sees the following playing roles in shaping the new farm bill:

Conservation groups will ask for more funding.

The last farm bill saw an increase in conservation funding and the establishment of the Conservation Security Program (CSP). “Unfortunately, CSP hasn't had a chance to really operate as it was authorized. The funding has been basically stripped making it a crippled program limping along when it could have been an opportunity for more ‘green box’ payments.”

In the coming debate, conservation groups will expect their funding to increase as a means to provide green box payments to producers. “Green box payments are non-trade distorting payments and aren't limited by WTO. I am doubtful of significant increases in conservation. I don't know if we will have a new CSP type program or if we will improve and enhance the current program.”

A considerable debate on energy.

The energy title in the current farm bill “doesn't have a lot of substance but will be significant in the future farm bills…As I (meet) with farmers and ranchers, the number one commonality is their concern for fuel, fertilizer and energy costs.”

Fruit and vegetable producers will want a slice of the pie.

There are over 300 different fruit and vegetables grown in the United States.

“The last couple of years they've asked for state block grant funding for research and promotion. They've not been big proponents of a direct payment however we are hearing rumblings that may change…Their only common agreement in the past farm policy debates have been the prohibition of fresh fruit and vegetables on program crop acres. Our economists have not been able to narrow down the possible losses incurred by producers if the prohibition is removed.”

Commodity groups will propose modest changes to the fundamental structure of program payments.

“The commodity groups have started meeting together to try to come to an agreement early. I believe if any changes are made to the program crop payments the organizations themselves will make the proposal for change. No one has anything to share publicly at this time.”

There will be an “all out war” on payment limits.

This particular battle “just won't go away. We've fought amendments to restrict or lower payment limits every year since passage of the 2002 farm bill. And we will continue to oppose payment limits or any tightening to the current limitations.”

Make no mistake, said Brooks, “America's farmers want to get their income from the marketplace, not the government. But market conditions can fluctuate widely and in years of low prices and rising costs, farm program payments help keep family farms in business.”

Brooks argued that farm program payments “have been critical to the economic survival of this nation's traditionally family-owned farm structure. Despite the big payments highlighted in press reports, the vast majority of commodity payments go to family farm operations. If farm program payments were making people rich, there would likely be more people waiting in line to farm. That just is not happening.”

An earlier visit to several ASU agriculture classes only backed up Brooks' contention. In those classes, only a handful of students planned to return to the family farm or production agriculture after school.

“Farm program payments are a public investment in the nation's food and economic security…We spend less than 10 percent of our disposable income on food. And we are a nation that has never experienced widespread hunger. Per capita, we spend approximately $3800 per year on food. We pay less than $100 in taxes that fund farm program payments.”

Farm payments cost the average taxpayer 22 cents per day. “That's less than a pack of cheap gum! You can't even buy a can of Coke for that. Folks, look at where we are today with regard to our dependence on foreign oil. Do we want to be in that situation with our food source?

“I encourage each of you today to speak up for agriculture. My grandmother reminded me this week: agriculture is the backbone of this nation.”